Business formation and operation is governed by state law. Whenever you want to determine if a particular business option is available to you, the primary source to check is the state business statute for your business's entity type in the state where your business is located. The laws that govern sole proprietorships in each state establish the types of names an owner can use to represent the business in the marketplace and the proper use of an assumed name, known as a "doing business as," or DBA.

Entity Types

When you start a business, you have a choice to set it up as an independent legal entity with an existence that is separate from its owner or to operate it as an extension of your own affairs. An independent legal entity is an entity form such as a corporation or limited liability company. You would select a unique business name for it in the same way as you would name a new baby. If you choose to operate the business as an extension of your own affairs, known as a sole proprietorship, you are required by law to operate it under your own name.

Requirements

A sole proprietorship operates as an extension of its owner's personal affairs, or as his alter ego. Most states do not require sole proprietors to register their business activities with the government, but they do require that you conduct your business activities under your own name. This lets the public know that if anyone has a problem with your business, that person should contact you directly.

Trade Names

State law does not allow sole proprietors to conduct business activity under a name other than the owner's legal name, unless the name is officially registered as a trade name, also known as a DBA. A DBA is considered an assumed name, and the law requires the state to maintain a record of the person behind the name. In most states, a sole proprietor must submit an application to the county clerk's office in his locale to gain permission to use a DBA.

Applicability

A sole proprietor is required by law to use his legal name to conduct business. Use of a DBA is always optional in every jurisdiction. If a sole proprietor does want to use a DBA, he must obtain permission from local authorities first. Typically, business owners who provide services, such as a personal trainer, are content to use their own name to conduct business. Sole proprietors who sell products, such ice cream cones and novelties from an ice cream truck, typically want to use a DBA.

About the Author

Terry Masters has been writing for law firms, corporations and nonprofit organizations since 1995. Her online articles specialize in legal, business and finance topics. Masters holds a Juris Doctor from Howard University and a Bachelor of Science in business administration with a minor in finance from the University of Southern California.